Are phone companies mis-selling their plans?

With people using ever more data on their smartphones, the monthly limits on most packages are often too little. Should phone companies be doing more to future proof their phone plans?

Smartphones have transformed millions of people’s lives over the past decade. And every year, we come to rely on them a little more – as new apps and functionality are designed.

The upshot is that every year, we’re likely to be using more data on our phones than we were the year before. But this is storing up a problem.

Unlike making a phone call, it’s hard for the average person to know exactly how much data they’re using. If you’ve got 200 mins of phone time on your phone – it’s not hard to keep a rough check on how much you’ve used. But with data it’s a whole different story. When you’re not on the wifi somewhere, apps are constantly downloading information to your phone – and when you’re actively using your phone, some apps use much more data than others.

Future-proofed phone contracts

Given that the average person has no clue how much data they need when they sign up to a monthly contract, the temptation for phone companies is to sell customers too little. And of course once you hit your monthly limit, you move onto much higher pay as you go rates – so the cost of using your phone can quickly mount up.

With most phone companies now offering packages with 500mb or 1gb of data as standard, it feels as though we’re in the midst of a financial services style mis-selling scandal.

When I last came to renew my smartphone plan last year, I asked the salesperson at O2 whether 1gb of data would be enough. She pulled up my account and said that I’d never got close to 1gb so far. The most I’d used in a single month was 700mb. On that basis, she told me that 1gb would be fine.

Roll the clock forward 18 months and I’m now using over 2gb a month. Thankfully, I was wise enough to consider that I’d probably be using more and more data over the next few years – and decided to buy a 2gb a month allowance. Even so, I’m now already exceeding that, with well over six months to go on my contract.

If I’d took the sales assistant’s advice and signed up to a 1gb limit, I’d have ended up paying tens of pounds in additional charges by now.

Do you know how much data you use?

To give O2 some credit, they do text me when I’m getting close to my limit. And you can buy reasonably priced bolt-ons to top your data – which I’ve done on one occasion. But I imagine many people simply don’t realise the implications of exceeding their limit – and are forced to learn the hard way.

I appreciate that mobile phone firms don’t have crystal balls. But if I could anticipate the direction of travel around data usage, then I’d wager that they could too. Whether or not the prevalence of packages with low data limits is a conspiracy to make more money – well, the jury’s out. But if millions of customers start getting hefty phone bills after being advised that they didn’t need to sign up to bigger limits, then the mobile industry could find itself in trouble with the regulator.

About the author

James Daley has been a consumer campaigner and financial journalist for the past 15 years.